Kaieteur News – The PPP/C is pussyfooting on the question of local content. In August, mere weeks after being sworn in to office, the President announced the establishment of an Advisory Panel on Local Content.
There was no need for an Advisory Panel on Local Content. It would be interesting to know from whence this suggestion came since the PPP/C is known to be averse to taking local advice or to establishing such advisory panels.
The APNU+AFC had already developed a draft local content policy. That policy was highly criticised but could have been salvaged through revisions rather than the PPP/C seeking to restart the entire process, as it appeared to be doing when it established the Advisory Panel on Local Content.
According to Vice President Jagdeo, the Advisory Panel has submitted a voluminous report. The government has asked the panel to cut it to around 30 pages. Based on what the Vice President stated during his appearance on Kaieteur Radio on December 23, 2020, the report incorporates many of the recommendations submitted by the various sectors.
According to the Vice President, the next steps would be to have the report cut down to size and from this, the President will then hold consultations with the various stakeholders. Arising out of these consultations, a negotiating brief will be developed which will form the basis for drafting a Local Content Law.
The long-winded process outlined by Jagdeo will take another year. The Panel will require another month, at the least, to summarise the various recommendations. Consultations will take another six months and then another few to produce what Jagdeo misleading calls a “Negotiating Brief”.
The only entity with which negotiations have to be held is Cabinet. Once the consultations are completed, a policy can be produced. But Jagdeo made no mention of a policy. He appears to want to go straight towards a Local Content Law. Placing the cart before the horse is typical of the PPP/C’s ineptitude.
There is no need for this long drawn-out process as detailed by the Vice President. It amounts to pussyfooting. Why consult again with the very stakeholders whose views would have been sought by the Advisory Panel?
Developing a Local Content Policy and Local Content Law are not rocket science and should not be subject to this extended process as outlined by Jagdeo. Local Content Policies exist in other parts of the world. All that needs to be done is to first tailor a policy based upon the advice of the Local Content Advisory Panel, develop a revised draft policy (since one already exists) and then proceed immediately to draft a local content law.
The Government is humming and hawing. Consultations for the PPP/C amounts to window-dressing. The PPP/C does not have a track record of being serious about public consultations. It is therefore playing for time.
Jagdeo and the PPP/C have been in opposition for five years. They have seen what the APNU+AFC has done in relation to Local Content. The PPP/C therefore had enough time to have produced a revised draft of the existing Local Content Policy.
The local content ship has already sailed. A Local Content Policy will have little effect on Exxon. No new policy or law can prejudice Exxon’s rights. This was built-in to the contract signed between ExxonMobil and the Government of Guyana.
The Stability Clause in the Production Sharing Agreement insulates Exxon and its contractors from any adverse economic effects occasioned by changes to Guyana’s laws. Should such adverse economic effects occur as result of any new law being passed, the Government is obligated to restore the lost or impaired economic benefits to Exxon and its contractors.
ExxonMobil has the upper hand. Its agreement was drawn up by legal experts, unlike the situation on the Guyana side where the Coalition went into the negotiations without such expertise. All Exxon has to do is to claim that any Local Content Law or Policy adversely affects the contracts which it has signed or which it will enter into in the future. This will effectively nullify any Local Content Policy and Law.
The PPP/C knows this all too well. And therefore, it is in no hurry to rush through any Local Content Policy and Law.
In any event, most of the contracts for the supply of goods and services have already been snared by foreign firms and there is nothing much left for Guyanese, not even for transporting those big pipes from the wharves to the shore bases. No wonder the PPP/C is pussyfooting with the Local Content Policy and the Local Content Law.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)
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